Texas PACE Program Authority Benefits to Contractors

Texas PACE Program Benefits

Contractors are using the Lone Star Texas PACE Program as a tool to grow their business. PACE financing can also be combined with other utility rebates and tax incentives to further reduce project cost.

PACE projects include 100% financing on hard and soft costs with no down payment necessary on high-efficiency products. Utilizing PACE financing allows increased project size and preserves the building owner’s capital for other investments, allowing them to receive new equipment with little impact to operating income.

PACE projects require energy audits to verify utility savings, building trust with the building owner that financial projections are reasonable.

What types of projects are eligible for PACE?

Texas PACE legislation authorizes PACE funding for the installation of Qualified Improvements. Qualified Improvements must:

  • Be permanently fixed to the real property;
  • Have a demonstrated capacity to decrease
    • Water consumption or demand; and/or
    • Energy consumption or demand (Includes renewables and distributed generation products or devices on the customer’s side of the meter that use energy technology to generate electricity, provide thermal energy, or regulate temperature); and
  • Have a useful life that exceeds the term of the PACE financing agreement.

What type of properties do not qualify for PACE?

Properties that are statutorily ineligible for PACE assessments include:

  • Facilities for undeveloped lots or lots undergoing development at the time of the assessment; and
  • Government owned real property.

What types of properties qualify for PACE?

The PACE Act permits PACE assessments to be placed on property that is:

  • Privately owned commercial real property – including not-for-profit real property such as private schools, medical facilities, churches, etc.;
  • Privately owned industrial real property; or
  • Privately owned residential real property with five or more dwelling units.

Any of these properties must also:

  • Be located within the jurisdiction of the PACE program;
  • Have a title that is not in dispute; and

Where there is a preexisting mortgage lien on the property: the mortgagee must be given written notice of the owner’s intention to participate in the PACE program at least 30 days before the owner enters into a contract with the PACE program; and, the mortgagee must provide written consent to participation in the PACE program.